Quick Answer: Funding Home Improvements via Remortgage
Remortgaging to fund home improvements is the easiest-approved use case for capital raising — UK lenders almost universally accept it. Maximum typical LTV: 85% (some specialist lenders 90%). On a £350,000 home with £180,000 existing mortgage, you could raise up to ~£117,500 at 85% LTV, subject to passing affordability on the larger loan. Value-adding projects (lender-friendly): loft conversion, extension, garage conversion, new kitchen, energy-efficient retrofit. Less compelling for lenders but still acceptable: cosmetic refresh, decorating, garden. Compare to alternatives: personal loan 7-12% over 3-7 years; secured loan 7-12% over 3-25 years; remortgage 4.5-5.5% over 10-30 years. Mortgage wins on monthly cost; personal loan wins on total interest if you can repay within 5 years.
Why Remortgage for Home Improvements?
Mortgage interest rates are typically much lower than personal loan or credit card rates, making a remortgage one of the cheapest ways to fund significant home improvement work. By borrowing against the equity in your home, you can access larger sums than most unsecured lenders would offer.
There's also a potential double benefit: well-chosen improvements can increase your property's value, building more equity over time. Projects like extensions, loft conversions and new kitchens consistently add value to UK homes, often by more than they cost.
How Much Can You Borrow for Improvements?
The amount depends on your available equity and what the lender's affordability checks show you can repay. Most lenders allow capital raising at up to 85% to 90% LTV, and home improvements are generally viewed favourably because they're seen as investing in the property that secures the loan.
For a straightforward kitchen or bathroom renovation costing £10,000 to £20,000, most homeowners with reasonable equity will have no difficulty raising the funds. Larger projects like extensions or full refurbishments costing £50,000 or more will need more equity and stronger affordability, but are still very achievable.
Which Improvements Add the Most Value?
Not all home improvements deliver the same return on investment. According to UK property experts, the projects that typically add the most value include:
- Extensions — a single-storey rear extension can add 5% to 10% to your home's value
- Loft conversions — a well-executed loft conversion can add up to 20%
- Kitchen renovations — an updated kitchen can add 5% to 10%
- Bathroom upgrades — a modern bathroom can add 3% to 5%
- Energy efficiency improvements — insulation, new windows and solar panels are increasingly valued by buyers
Improvements that are purely cosmetic or very niche tend to add less value, so think about resale appeal as well as your own enjoyment.
Things to Consider Before You Apply
Before remortgaging for improvements, check whether you'll face early repayment charges on your current deal. If your fixed rate or tracker period hasn't ended, the ERCs could wipe out any savings from the new deal. You may be better off waiting until your current deal expires.
Also consider whether a further advance from your existing lender could be a simpler option. This lets you borrow extra without switching your whole mortgage. Your lender can advise whether this is available and what rate they'd charge.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.